With a conventional netbook clearly out of the question, researchers for Piper Jaffray said Thursday there's mounting evidence to suggest Apple next year will introduce its own take on the market in the form of a tablet-based device that will sell for $700 or less.

"Between indications from our component contacts in Asia, recent patents relating to multi-touch sensitivity for more complex computing devices, comments from [chief operating officer] Tim Cook on the April 22nd conference call, and Apple's acquisition of P.A. Semi along with other recent chip-related hires, it is increasingly clear that Apple is investing more in its mobile computing franchise," analyst Gene Munster and his team wrote in lengthy research note to clients.

More specifically, the analyst said these investments will likely culminate with the launch of a touch-screen tablet with a display somewhere between 7- and 10-inches at a special event sometime in the first half of 2010. Such a move, he added, would be consistent with management's comments that Cupertino-based company has no interest in catering to the existing segment for "cheap" miniaturized notebooks and its spoken desire to differentiate in a market currently dominated by cramped computers with razor thin margins and a subpar user experience.

Thus far, Munster's contacts in the component supply chain have not seen a prototype of the device but say there's ongoing discussions between the company and its suppliers about the parts that will eventually be required to build the product.

For his part, the analyst believes the device will end up retailing somewhere in the range of $500 - $700, bridging the gap between the $399 iPod touch and the $999 MacBook. He expects that it will be driven by a proprietary microprocessor designed in-house by engineers Apple adopted in the acquisition of P.A. Semi and others it's known to have hired in recent months.

Apple has also been consistent in its communications that software will play a vital role in any and all of its efforts to achieve success in the mobile space, and therefore Munster anticipates that the tablet will run an operating system more robust than the iPhone's but optimized for multi-touch, unlike Mac OS X. He envisions a new "hybrid" piece of software that would meld traits from both its Mac-based OS and the one that runs on both the iPhone and iPod touch.

"The device's OS could bear a close resemblance to Apple's iPhone OS and run App Store apps," the analyst wrote. "Apple could possibly introduce a second screen resolution into the iPhone OS software development kit (SDK), enabling developers to build apps specifically for the larger tablet device." The larger screen real estate offered by a tablet could also pave the way for more than one iPhone application to run simultaneously in unaltered form.

"Key apps, like Safari and Mail, could make use of the larger screen resolution, making Apple's tablet appealing for more extended use, but the company could continue to leverage its primary asset in mobile computing, the App Store, in this scenario," he explained.

Alternatively, Munster said Apple may be working on a customized version of Mac OS X for traditional computers that would be optimized for its multi-touch platform. Such an effort would be extensive and time consuming, even if it's already underway, and therefore the analyst believes it may not be ready for consumption until sometime next year.

"In other words, we expect the end result of the expected product to be launched later but with more dramatic differentiation than the Street is expecting," he wrote. "Another important possibility for the tablet that we expect Apple to launch in 2010 is that of wireless carrier subsidies."

Apple has become all too familiar and rather comfortable with subsidy pricing on its iPhone 3G, and Munster believes the company may take a similar approach to sales of the tablet. He also points to recent media reports about ongoing talks with Verizon wireless, which lead him to believe the company "could include an integrated mobile data feature such as 3G wireless into the device and partner with AT or Verizon to subsidize the device together with a contract for a wireless data plan."

The Piper Jaffray analyst also told clients that a tablet device could pave the way for Apple to get more serious about eBooks and give devices like the Kindle and Kindle DX from online retailer Amazon.com some unwanted competition.

"While we do not expect this to be a core selling point for the device, it would make sense for Apple to develop an electronic reading app for the device (and possibly for iPhones and iPod touches too) along with digital books sold on the iTunes Store," he wrote.

Munster maintained his Buy rating and $180 price target on shares of Apple.

I hope it come with some sort of wireless plan (hopefully Verizon) whereas every update of the software is not charged $$ like the Touch.

Apple wouldn't charge for the Touch update if they didn't have to. I doubt they'd use Verizon. Wishful thinking there.... That is unless some miracle happens and Apple uses Verizon for the new iPhone too. AT&T isn't the reason why Apple charges for its updates on the Touch.

I can't help it if the truth hurts you so much. I'm not the only one saying that Mac development has been hindered by iPhone. Look at all the updates and lateness of Leopard. Look at MobileMe fiasco. Now this. Get over it.

I just don't understand why everyone is so in love with this tablet idea. These things have such an exceedingly limited usefulness.

Do you really want to keep it flat on your lap while you type on it? Because that won't add an incredible amount of strain to your neck or anything. Or maybe you can hold it up with one hand, and type with the other one. Yeah, that'll be a blast. Try it now with your keyboard. Hold it up with one hand and type with the other. See how long you keep that up.

Plus, no mouse means no rollover, so even if this thing has Flash support, good luck visiting any Flash-based websites and not wanting to throw that $700 tablet like a frisbee.

If there were no more client-side hard drives, if everything (including your applications) was stored on the internet and you could access it anywhere, then maybe something like this - essentially just a portable window to the internet - might be useful. Otherwise, as a second computer, this thing is going to be a $700 paperweight.

Honestly, I love Apple, and I don't think they're dumb enough to build something like this. However, they did create a Shuffle with no buttons, so I've been wrong before...

I can't help it if the truth hurts you so much. I'm not the only one saying that Mac development has been hindered by iPhone. Look at all the updates and lateness of Leopard. Look at MobileMe fiasco. Now this. Get over it.

I don't see much truth in that. I see conspiracy, but no truth in the matter at all. I can't see how Leopard can be late. Yes, they pushed it back ONCE to get the iPhone out the door. Since then there's no evidence to the iPhone OS hindering Leopard. These are 2 separate teams.

MobileMe was just the wrong time to roll it out. Absolutely have NOTHING to do with the iPhone. Its great how you can take everything wrong and blame it on the iPhone.

Apple wouldn't charge for the Touch update if they didn't have to. I doubt they'd use Verizon. Wishful thinking there.... That is unless some miracle happens and Apple uses Verizon for the new iPhone too. AT&T isn't the reason why Apple charges for its updates on the Touch.

Oh I thought the iPhone updates were factored into its plan and therefor claiming it payment is over 2 years (Sarbanes Oxley)- therefor no charge. Touch does not have this due to no plan. Correct me if I'm wrong.

I don't see much truth in that. I see conspiracy, but no truth in the matter at all. I can't see how Leopard can be late. Yes, they pushed it back ONCE to get the iPhone out the door. Since then there's no evidence to the iPhone OS hindering Leopard. These are 2 separate teams.

MobileMe was just the wrong time to roll it out. Absolutely have NOTHING to do with the iPhone. Its great how you can take everything wrong and blame it on the iPhone.

And what's your excvuse for the MAcMIni? This will be good- I'm waiting to hear how'll you excuse everything in favor of the iPhone.

Munster anticipates that the tablet will run an operating system more robust than the iPhone's but optimized for multi-touch, unlike Mac OS X. He envisions a new "hybrid" piece of software that would meld traits from both its Mac-based OS and the one that runs on both the iPhone and iPod touch.

In what way is the current Mac OS X NOT optimized for multi-touch? (For those who might not know, the new laptops come with multi-touch enabled track pads.)

Hybrid OS? Apple has made it clear that the iPhone OS is a subset of Mac OS X.

I don't think the success of subnotebooks should be taken as evidence that people want a computing device that size. It should be taken as evidence that they want, specifically, smaller and/or cheaper notebooks.

yes it does . Apple uses the 2 year AT&T plan as a factor into it's payment of the device.

You made a statement that implies that they are linked. They are not. Apple can choose go for whatever accounting model they choose. The AppleTV is on that same model and it isnt subsided by any carrier. Are you really that dense or are you choosing to be ignorant to the same topics weve discussed over and over? If you have a psychological problem let me know and Ill back off, otherwise I cant but think you are trolling.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

They are smartly hedging their bets that things will get better soon. I don't mean that things will just bounce back, but that psychologically coming out with a new killer device in this economy isn't smart. Apple has acted counter to the rest of the computer world in actually making gains this year, but that doesn't mean they can take userexperience transforming risks.

This device will live or die on usability. When's the last time you used your Windows based tablet? I still have an ol dissue of PC Magazine ( I think it was ) that declared pen computing a solid future and that tablets were going to become their own market segment.

Apple has the first real chance at pulling this off, but the cards are stacked against it. Ironically I think the largest threat to this device failing is that people may just simply be happy with the ipod touch for factor and not want this device.

Right now the only thing i would think a 9 inch device could do better than iPhone/Touch is webbrowsing clarity, and movie watching. But you are crossing an imaginary line ... to where your expectations of the deviice might shift into "real" computer. If mentally the public does this, then Apple runs the risk of seriously disappointing people. They will want it to be "real" OS X then with all the features you're accustomed to, including an otional keyboard attachment. Fortunately I know the 3rd party people will make a mini keyboard and trackpad the very accessory made for this.

I hope it's a great success.. I want it to be a success. but waiting is likely a very good thing, despite my own wishes they bring it out this fall

In what way is the current Mac OS X NOT optimized for multi-touch? (For those who might not know, the new laptops come with multi-touch enabled track pads.)

Hybrid OS? Apple has made it clear that the iPhone OS is a subset of Mac OS X.

Does this guy really have a clue?

iPhone OS can't run Muti Apps (amongst other things) which you would most certainly want in a tablet (that is if you can think for yourself and not let Apple do it for you). Therefor it would need an OSX lite.

They are smartly hedging their bets that things will get better soon. I don't mean that things will just bounce back, but that psychologically coming out with a new killer device in this economy isn't smart. Apple has acted counter to the rest of the computer world in actually making gains this year, but that doesn't mean they can take userexperience transforming risks.

I hope it's a great success.. I want it to be a success. but waiting is likely a very good thing, despite my own wishes they bring it out this fall

Right- there are piles of them sitting out in some hangar somewhere right now.

iPhone OS can't run Muti Apps (amongst other things) which you would most certainly want in a tablet (that is if you can think for yourself and not let Apple do it for you). Therefor it would need an OSX lite.

Since when cant it run multiple apps? What is your reasoning for this?

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

In what way is the current Mac OS X NOT optimized for multi-touch? (For those who might not know, the new laptops come with multi-touch enabled track pads.)

Hybrid OS? Apple has made it clear that the iPhone OS is a subset of Mac OS X.

Does this guy really have a clue?

Nobody's saying they couldn't implement it into OS X if they needed to, but the touch pad multitouch isn't exactly the same thing. For instance, Asus netbooks have multitouch track pads, but XP doesn't support multi touch screens. Get what I'm sayin?

Does it really make sense for Apple to develop yet another operating system? Unless it's going be the same iphone OS with added resolutions I just don't see them recouping the costs of development.

This is where I stop trusting analysts. The iPhone OS is a variant of Mac OS X, and heck, it's running on a completely different instruction set. Besides x86 and ARM, there really isn't any other instruction set out there to use.

I just don't understand why everyone is so in love with this tablet idea. These things have such an exceedingly limited usefulness.

...

Honestly, I love Apple, and I don't think they're dumb enough to build something like this. However, they did create a Shuffle with no buttons, so I've been wrong before...

I agree that Apple wouldn't release the product you describe, but that's not necessarily how using a tablet has to be.

I, for one, would probably order one of those things immediately. Especially if it had a mode where it could act as a pen input device for my MacBook Pro, then "undock" and be its own browser/reader/etc.

This is where I stop trusting analysts. The iPhone OS is a variant of Mac OS X, and heck, it's running on a completely different instruction set. Besides x86 and ARM, there really isn't any other instruction set out there to use.

If its a tablet that is finger-based then a new UI would have to be made. The iPhone OS would be too small and the Mac OS would require a more precise pointing device. Even the Dock could be an issue. I think that is what is probably meant, not the kernels instruction set.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Right now the only thing i would think a 9 inch device could do better than iPhone/Touch is webbrowsing clarity, and movie watching. But you are crossing an imaginary line ... to where your expectations of the deviice might shift into "real" computer. If mentally the public does this, then Apple runs the risk of seriously disappointing people. They will want it to be "real" OS X then with all the features you're accustomed to, including an otional keyboard attachment. Fortunately I know the 3rd party people will make a mini keyboard and trackpad the very accessory made for this.

That's a very good point. How do Apple ensure people view it as an "excellent iPhone" and not a "crap computer?"

Isn't that what was said in early 2007, and Apple did the phone, iLife (events, new iMovie) , new aluminum iMacs, Leopard...

The aluminum imacs were not new but rather simply an enironmental retro-fit. We are all still waiting for the next TRUE iMAc. Hopefully in my lifetime.
Leopard was late and was truly buggy.
iLife is a given.
MobileMe a disaster in 08.
No new iMac in 08, 09.
Meanwhile netbooks selling like hotcakes- meaning more people entrenched in Windows.

You know exactly what I meant but are being a jerk once again. Of course it can run Mutiple Apps!!! Mutiple Apps running at once. Where's my spoon for you?

Multiple apps do run at the same time on the iPhone and Touch. The only thing Apple currently doesnt allow is the multiple 3rd-party apps to run at once. There is a difference and there is a reason for it, but you know that are just trolling.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

You know exactly what I meant but are being a jerk once again. Of course it can run Mutiple Apps!!! Mutiple Apps running at once. Where's my spoon for you?

His point, I believe, is that it can run multiple apps at once, which is why your iPod music keeps playing, your stopwatch keeps running and you keep receiving emails, etc whilst browsing Safari. So perhaps you're being the jerk, or just ignorant?

Oh I thought the iPhone updates were factored into its plan and therefor claiming it payment is over 2 years (Sarbanes Oxley)- therefor no charge. Touch does not have this due to no plan. Correct me if I'm wrong.

The AT&T subsidy has no direct relationship to Apple choosing subscription accounting for the iPhone. Evidence: Apple also uses subscription accounting for AppleTV. Apple could've chose to use subscription accounting for the iPod touch, but chose not to. Why it chose not to, is a mystery.